Ams Osram selling its finished headlamp operations (UPDATED)

In another retreat from the general illumination market, ams Osram has agreed to sell its finished headlamp operations — once a pride and joy of the former Osram — for €65 million, or less than half of what the National Football League’s Green Bay Packers recently agreed to pay their quarterback.

The €65 million ($71.5 million) price is well below the €148 million ($162.6 million) in revenue that the troubled operations generated in 2021.

The sale of Automotive Lighting Systems GmbH (AMLS) to Levallois, France-based Plastic Omnium includes final headlamp assemblies and LED headlamp modules.

While Premstaetten, Austria–based ams Osram is withdrawing from finished headlamp products, it is by no means exiting the automotive sector outright. It will continue to sell and develop products on the component and component system level. These include LEDs, lasers, and sensors such as Eviyos multi-pixel LED light sources, lidar for autonomous driving, other sensors for detecting driver fatigue and gestures, and RGB interior lighting. The company will also continue to sell replacement bulbs. The operations it is retaining are part of either the semiconductor group or the auto aftermarket group.

The sale of AMLS to Plastic Omnium marks the casting off of part of a long well-regarded Osram operation that dates its headlight history back to 1925, when Osram introduced a highly successful dual-filament headlamp called Bilux. Over the years Osram has proudly promoted itself as “number one in automotive lighting.”

But things went awry with a failed joint venture Osram formed in July 2018 with Hanover, Germany–based Continental AG, a maker of brakes, tires, powertrains, and other automotive products and systems. Two years after joining forces, the companies said they would dissolve the 1500-employee partnership within a year.

A few months earlier, Osram had recorded a €48 million impairment charge for the JV, which was to have develop sensor-linked, software-driven, intelligent LED and laser headlight systems and other digital illumination for car exteriors and interiors.  But its legs collapsed seemingly from the start. 

In last month’s year-end earnings call with analysts, ams CEO Alexander Everke reported that ams Osram dissolved the “loss making joint venture.”

With the dissolution, the company formed AMLS to take on the finished lighting systems, an ams Osram spokesperson explained to LEDs Magazine. 

AMLS has 770 employees in nine locations. Its divestiture to Plastic Omnium echoes the agreed sale of horticultural lighting company Fluence by Osram to Signify. In both instances, ams Osram is giving up finished illumination systems while carrying on with related LEDs and other components.

The sell-offs conform to ams Osram’s intentions to shed illumination while shaping itself as a components outfit, following the July 2020 acquisition of Munich-based Osram by ams. 

“The transaction represents a further step in the implementation of ams Osram’s previously communicated strategy to focus on dedicated strategic core technology and divesting businesses that are not seen as core to the corporate strategy,” the company said in announcing the sale of AMLS to Plastic Omnium today,

Ams boss Everke began articulating that mission as head of ams even before ams acquired Osram.  Since the two companies became one, Everke’s sales have also included, among others, illumination and smart lighting company Digital Lumens, the company’s North American LED driver and light engine operations, and a lighting components factory in Plovdiv, Bulgaria.

Not only do the sell-offs help focus the company, they also raise cash that should help ams continue to recover from the challenges of buying a company that had been about four times its size.

There is at least one notable illumination company that still remains in the ams Osram fold. That company, Hong Kong–based Traxon, provides architectural and façade lighting.

Ams Osram and Plastic Omnium said they expect to complete the transaction by the third quarter. 

Plastic Omnium is an €8 billion provider of systems and designs for cars including interiors, exteriors, and engines. It has 30,000 employees. 

A PO spokesperson described the acquisition as “an important milestone in Plastic Omnium’s smart bumper and tailgate strategy, addressing the lighting market and bringing valuable additional synergies to Plastic Omnium’s exterior body systems division.”

For an €8 billion company, the €65 million pickup would seem like a palatable price tag. To put it in perspective: the amount is less than half of the $150.8 million that the Packers agreed to pay star quarterback Aaron Rodgers last week. The French company hopes it can call the right plays that will turn the headlamp lighting operation profitable again.

MARK HALPER is a contributing editor for LEDs Magazine, and an energy, technology, and business journalist ([email protected]).

*Updated Mar. 28, 2022 1:23 PM for additional link to Eviyos.

*Updated Mar. 31, 2022 12:40 PM for clarification of automotive unit activities.

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